R.R. Donnelley, the nation’s largest commercial printer, has agreed to pay the U.S. Postal Service $22 million to settle civil allegations of mail fraud. Donnelley was charged with underpaying postage on thousands of catalogs, magazines and other materials over the last 10 years.
The negotiated settlement was disclosed Wednesday by Miles R. Stiles, U.S. Attorney for the Eastern District of Pennsylvania in Philadelphia.
Postal officials, describing the settlement as the highest of its type in at least a decade, accused the Chicago-based firm with violating an honor system that gives volume mailers a discount for presorting their mailings before entering them into the mail stream.
Specifically, it was alleged that workers were seen by postal inspectors inserting unsorted catalogs, magazines and other materials that fell out of pre- sorted mail bundles into bundles of mail that had already been processed for distribution. Workers were observed first at the firm’s Lancaster, PA, plant, and subsequently at other Donnelley facilities across the country.
Existing USPS rules require workers to either replace the mis-sorted mail pieces by putting them back into their appropriate bundles for reprocessing, or pay additional postage for those unsorted items.
The company will be working with the USPS to “develop certain solutions for Donnelley in those areas that are not in compliance with postal regulations” while helping to establish “realistic rules, standards and approaches that can be effected for the entire [printing/mailing] industry,” said Donnelley spokesman William Lowe.
Since 1989, Donnelley printed more than 61 billion pieces of mail and paid some $12 billion in postage, but “at the wrong rate,” according to Lowe.
Noting that Donnelley has “detached mailing centers staffed by USPS employees who routinely advise us on mailing practices, inspect and approve outgoing mail,” Lowe said postal inspectors advised the firm and its employees “not to rely on their advice when it comes to revenue and postal rate matters.”
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